S&P Dow Jones CoreLogic released their July Case Shiller home price indices this morning with another national record set for single family home price appreciation over the last 12 months – 19.7%. That is substantially up from the 18.6% reported last month.
Meanwhile, the Case Shiller Chicago area also set another record for home price appreciation but it was a paltry 13.3%, which was the smallest number among the 20 metro areas tracked. But didn’t we record a 13.3% gain last month? We did. But then the Case Shiller folks restated the numbers and last month only came in at 13.0%. So, yeah, we set a record but it’s kinda meh…
Condo prices rose by 4.5%, which is the highest appreciation in 8 months.
I’ve graphed the historic annual appreciation rates for the Chicago area below.
Craig J. Lazzara, Managing Director and Global Head of Index Investment Strategy at S&P DJI, commented on the records being set across the board and Chicago’s stepchild status:
The last several months have been extraordinary not only in the level of price gains, but in the consistency of gains across the country. In July, all 20 cities rose, and 17 gained more in the 12 months ended in July than they had gained in the 12 months ended in June. Home prices in 19 of our 20 cities now stand at all-time highs, with the sole outlier (Chicago) only 0.3% below its 2006 peak. The National Composite, as well as the 10- and 20-City indices, are likewise at their all-time highs.
July’s 19.7% price gain for the National Composite is the highest reading in more than 30 years of S&P CoreLogic Case-Shiller data. This month, New York joined Boston, Charlotte, Cleveland, Dallas, Denver, and Seattle in recording their all-time highest 12-month gains. Price gains in all 20 cities were in the top quintile of historical performance; in 15 cities, price gains were in the top five percent of historical performance.
We have previously suggested that the strength in the U.S. housing market is being driven in part by a reaction to the COVID pandemic, as potential buyers move from urban apartments to suburban homes. July’s data are consistent with this hypothesis. This demand surge may simply represent an acceleration of purchases that would have occurred anyway over the next several years. Alternatively, there may have been a secular change in locational preferences, leading to a permanent shift in the demand curve for housing. More time and data will be required to analyze this question.
Case Shiller Chicago Area Home Price Index By Month
I’ve graphed the Case Shiller Chicago area home price indices below going back to 1987 along with a trend line of single family home price growth based on the pre-bubble years. In July single family home prices rose 1.2% from June while condo prices rose 1.0%.
As Craig Lazzara pointed out the Chicago area is the only metro area still below peak bubble prices but single family homes are only 0.3% below while condos are only 0.6% below. Because we are now so close to the peak most homebuyers over the last 34 years should finally be above water on their homes. Only those who bought single family homes and condos from August – November 2006 should have, on average, paid more for their homes than they are worth today.
At this point the increase from the depths of the crash has been dramatic. Single family homes have risen a total of 63.6% and condos have bounced back 64.5%. Despite these dramatic rises, including the soaring prices of the last year, we are nowhere near catching back up to that red trend line. In fact, we are 21.0% below it.
#ChicagoHomePrices #CaseShiller #HomePrices
Gary Lucido is the President of Lucid Realty, the Chicago area’s full service real estate brokerage that offers home buyer rebates and discount commissions. If you want to keep up to date on the Chicago real estate market or get an insider’s view of the seamy underbelly of the real estate industry you can Subscribe to Getting Real by Email using the form below. Please be sure to verify your email address when you receive the verification notice.